Posted on

Philip Morris U.S.A. v. Williams, 127 S. Ct. 1057 (2007)

Case Name: Philip Morris U.S.A. v. Williams
Citation: 127 S. Ct. 1057 (2007)

Issue: Whether the Constitution’s Due Process Clause permits a jury to base punitive damages on its desire to punish the defendant for harming individuals not before the court.

 

Facts: Williams’ widow sued Philip Morris, the manufacturer of Malboro for negligence and deceit in causing the death of her husband. At trial, the court did not accept Philip Morris’ instruction that “the jury could not seek to punish Philip Morris for injury to other persons not before the court.” However, it allowed the plaintiff’s attorney to consider all those in the state of Oregon who will die from cigarettes that Philip Morris makes.

 

Procedural Posture: “The jury found that Williams’ death was cause by smoking; that Williams smoked [ ] because he thought it was safe to do so; and that Philip Morris knowingly and falsely led him to believe that this was so.” The jury awarded compensatory damages of $821,000 and $79.5 million in punitive damages. The Oregon Supreme Court upheld the judgment.

 

Holding: A punitive damage award such as this “amounts to a taking of “property” from the defendant without due process.”

 

Reasoning: The Due Process Clause does not allow a State to use a punitive damage award to punish a defendant for injury that it inflicts upon nonparties. Relied on BMW of North America, Inc. v. Gore and State Farm Mutual Automobile Insurance Co. v. Campbell.

 

Judgment: The Supreme Court vacated the Oregon Supreme Court’s judgment and remanded the case for further proceedings.
Posted on

Takings Ad Hoc Test

A regulatory taking is different from eminent domain because title to the property is not taken. Instead, the government regulation impacts the land so much that it eliminates all economically beneficial use or restricts use of the land to the extent that the landowner should receive compensation under the Fifth Amendment. If a landowner can show that all economically beneficial use has been eliminated*, then he is entitled to just compensation. This will be hard for a landowner to prove so a court is more likely to balance the government interest against the burden on the landowner to determine if the landowner is entitled to just compensation.

Penn Central Transportation Co. v. New York City (1978) is a seminal case in which the Court created an ad hoc test to determine whether a zoning law constituted a regulatory taking under the Fifth Amendment. The court will look at the particular circumstances of each case, make factual inquiries, and focus of these three major factors:

  1. The character of the government action
  2. The protection of reasonable, investment-backed expectations; and
  3. The economic impact of the regulation on the particular owner

If, after balancing these interests, a regulation is deemed an unconstitutional taking of property, the landowner is entitled to just compensation.

 

*This is deemed a categorical per se taking. Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). Government mandated permanent physical invasions are also deemed a per se taking.

Posted on

Takings in Property Law

The central principle of the Takings Clause (from the Fifth Amendment) is to “bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49 (1960).

To establish a “taking” a plaintiff must show three separate elements:

1. A taking by the state;

2. For public use (interpreted as a legitimate public purpose);

3. Without just compensation

In defending an alleged “taking,” the state must show its justification in some aspect of their police power, asserted for the general welfare.

If a taking is found, a court will order the state to provide just compensation to the owner. The Supreme Court has determined that “fair market value” constitutes just compensation. Fair market value is defined as “the amount a willing buyer would pay in cash to a willing seller.”